In a recent court ruling, California Judge Michael Fitzgerald determined that celebrity Kim Kardashian’s social media posts promoting EthereumMax (EMAX) were false. As a result, the case against Kardashian and other public figures will continue, attracting attention from investors and the general public alike.
Retired boxer Floyd Mayweather Jr., National Basketball Association Hall of Famer Paul Pierce, and others were accused of misguiding investors through the promotion of digital assets associated with EMAX tokens. It’s essential to point out that while EMAX tokens are built on the Ethereum blockchain, they are not related to the Ethereum cryptocurrency, the second-largest by market cap.
Previously, a tentative ruling in December showed that Judge Fitzgerald was considering granting Kardashian’s motion to dismiss the allegations against her. Nevertheless, her attempt to dismiss an amended complaint was denied due to the substantial updates made by the plaintiffs, which included over 100 pages of new allegations.
The expanded complaint “adequately alleged” that Kardashian’s May 2022 social media posts were false, and her June post was misleading by suggesting that EMAX tokens were scarce. On the other hand, Pierce’s motion to dismiss similar claims was denied, while Mayweather’s motion was partly granted, as his comments about EMAX tokens at the Bitcoin 2021 conference were considered statements of belief.
Another significant aspect of the case is that several securities claims have been blocked. The judge granted the dismissals due to a lack of specificity, but left room for amendment. The defendants, which include EMAX Holdings LLC, argued that the investors now claim EMAX token purchases to be investment contracts, a year after their initial complaint that had not mentioned securities at all.
It’s worth mentioning that in October, Kim Kardashian was fined $1.2 million by the U.S. Securities and Exchange Commission for promoting EMAX to her millions of Instagram followers.
The plaintiffs have been given a final chance to amend their complaint by June 26. The ongoing case highlights the necessity for accurate and transparent promotion of digital assets, creating a divide between those who believe in stricter regulation and others who may see celebrity endorsements as a way to increase public interest and engagement with cryptocurrencies.
Ultimately, the outcome of the case will influence the way digital assets are promoted and may help shape the future of regulation in the ever-evolving and expanding crypto industry.
Source: Coindesk
